What is the Fanatics lawsuit against Marvin Harrison Jr.? Why hasn't he signed a licensing deal? Here's what we knowNFL commissioner Roger Goodell said in March that he thinks there will be some changes to team ownership structures. Michael Rothstein is a reporter for NFL Nation at ESPN. Rothstein covers the Atlanta Falcons. You can follow him via Twitter @MikeRothstein.
A move to allow private equity firms or institutional wealth to invest as limited partners could free up cash for owners to pursue projects such as stadium renovations and would represent a large shift in how the league has historically operated, with the majority of franchises traditionally run as family businesses with single-family ownership.
Since 2015, there have been at least 150 such deals per year with at least $1 billion spent annually, including a peak of 226 deals in 2021, according to Preqin. In 2022, private equity firms spent close to $86 billion in the sports industry, including RedBird's $1.3 billion purchase of Serie A soccer team AC Milan from Elliott Management. As of April 23, there have been 31 deals worth $20.1 billion this year, according to Preqin.
"These people are really rich and successful. They're used to being the center of the universe. And now you go, I need a quarter of a billion dollars. Fantastic, what do I get? Nothing," Leonsis told ESPN."Do you have any control? Any role? No, you're passive investors. You'll get your name on a website somewhere or something and you get to tell people I own a piece of an NFL team.
For other majority owners, who have multiple sports franchises or businesses and whose wealth comes from sources outside of the team, allowing private equity to purchase minority shares in a team can free up cash for stadium or real estate deals, or other personal, business or philanthropic purposes.
"NFL teams are profit-making machines, and private equity would want to both share in the short-term year-to-year profits and also the long-term capital gain." Kansas City Chiefs owner Clark Hunt is a member of the committee exploring changes to ownership in NFL teams. Guidelines from other leagues could inform the NFL's private equity structure. For example, the NBA and NHL only allow private equity and sovereign wealth funds to buy passively into organizations -- meaning the funds don't have any real decision-making power. It remains unclear whether the NFL would allow investments from pensions or sovereign wealth funds.
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